Judgment

S. K. Das, J. (For himself and Kapur, J.) : This is an appeal by special leave from the judgment and orders of the High Court of Bombay dated 16-2-1955, in a reference under S. 66 (1) of the Indian Income-tax Act, 1922, hereinafter called the Act. The reference was made in the following circumstances.

2. The Hindu undivided family of one Gandalal carried on business in cloth in Wadhwan in Kathiwar, which at the relevant time was outside British India. The family consisted of Gandalal and his four sons, (1) Girdharlal, (2) Hansrai, (3) Nandlal and (4) Ramniklal. In 1944 Nandlal came to Bombay and started a cloth business in partnership with other persons, the partnership being known as Amulakh Amichand & Co. Nandlal s share in the partnership was ten annas and that of his three partners, who belonged to the family of Amulakh Amichand, six annas. It was stated that the family of Amulakh Amichand which was a well known business family of Bombay, did not supply and capital to the partnership and Nandlal alone was the financing partner. On 13-4-1944, Nandlal received a sum of Rs. 50,000 from the Hindu undivided family of which he was a member, and a further sum of Rs. 50,000 on 2